Appearances are deceiving at this point in the cycle. While the headline figures suggest prices are falling, in reality average lead hull and liability prices rising alongside passenger and average fleet values.

Preliminary data for the frenetic December renewals suggests that prices are being set by risk perception of individual programmes, not by overall market trends. Following markets, meanwhile, are being highly selective about the risks that they support.

The airline insurance market appeared to be stabilising prior to the string of losses in June and July. While capacity remains abundant, negotiations are likely to be robust as the market struggles to maintain the balance between premium and claims.

Various indicators from around the world suggest that the outlook for the airline industry is becoming more positive. The conditions are still very uncertain however, we are a long way from the bullish days of 2007.

Prices in the airline insurance market continue to rise, but loss levels are still broadly around average and capacity continues to be stable. The aviation industry is facing a myriad of challenges, but at least at this point the insurance markets are providing some consistency.

May premium averages suggest that the hard markets witnessed last year have abated somewhat, but prices continue to rise. Losses are currently within 2% of the long term average, but the ramifications of the volcanic eruption in Iceland continue to dominate conversation in the airline insurance market.